Sina: Even In China, Ad Sales Slow; Morgan Downgrades

Morgan Stanley analyst Richard Ji this morning cut his rating on Sina (SINA) to Equal Weight from Overweight. He also cut estimates: for 2008, he now sees $1.38, down from $1.41, and for 2009 he now expects $1.41, down from $1.69. For 2010, his forecast is $1.67, down from $2.11.

Ji is concerned about softening of China’s advertising market, and he thinks Sina is more exposed to the slowdown than other China Internet portals. He notes that the company generates about 70 percent of its revenue from online ads, versus 40 percent-plus for Sohu and mid-teens for Tencent and NetEase. He also notes that the company had created an Olympics channel, generating extra inventory; but that (for obvious reasons) that channel has ceased to exist.

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